Japanese firms establish bond trading venture

Japanese firms establish bond trading venture

Daiwa, Nikko and Nomura have established an online Japanese government bond trading consortium for institutional investors, dubbed Yensai.com.

The founders say the joint venture company will operate an Internet portal site for the trading of JGBs, beginning in June 2001. Yensai has been created with paid in capital of Y300 million.

Assuming government authorisation is forthcoming, Yensai says that Deutsche Securities, Tokyo Mitsubishi Securities, Mizuho Securities, and Morgan Stanley Dean Witter Japan have agreed to invest in the venture via a planned capital expansion. Daiwa, Nikko and Nomura are inviting other fixed income traders to join the Yensai consortium.

The establishment of the new company follows the approval of Japanese regulators for Garban Totan Securities to begin electronic trading in JGBs. MTS Japan, the Japanese arm of the European government bond trading network MTS is also expected to begin trading today. Competition is set to intesify still further with the expected arrival in the market of Instinet and inter-dealer broker Japan Bond Trading, which have also established a bond trading joint venture company.

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